All posts tagged climate change solutions

Tesla Model 3 is driving a massive surge in U.S. electric vehicles sales. According to Inside EVs, Tesla Model 3 sales hit 17,800 during August in the U.S. Meanwhile total U.S. EV sales likely hit near 35,000.

Inside EVs is predicting another record month for US EV sales in August even as the 300K annual rate falls into reach. Meanwhile Tesla production for Q3 is tracking for 70-80 K even as EV advances continue.

During the first quarter of 2018, Tesla’s Model 3 production ramp enabled it to steal the top EV producer crown from BYD and BMW. But with Tesla now building as much as 3,500 Model 3s and 5,500 EVs in total per week, it appears to be set to establish a major lead in the critical clean energy auto segment.

(Other automakers appear to have been caught somewhat flat-footed by Tesla’s high-quality EV surge. Traditional manufacturers like BMW have got a lot of work ahead of them if they want to catch up.)

Pretty impressive. But it’s nothing compared to what Tesla is now doing. During 2017, the high-quality EV manufacturer sold just over 101,000 electrical vehicles. But during 2018, that number is likely to double to around 200,000 — driven by a very rapid ramp in Model 3 production. The effects of this ramp are clear as day. It will propel Tesla into the position of global EV sales leader for at least the next 1-2 years.

(Tesla Model 3 Production appears to have surged to around 3,500 during mid-May. This is evidence of Tesla hitting its targets. Model 3 production is likely to surge to around 5,000 during June. No other automaker presently produces EVs in such high volumes. Image source: Bloomberg.)

Tesla’s advantages in the early stages of this race are multiple. It owns a massive supercharger network that is presently without parallel. It owns a very large battery and growing battery production capability. And it presently produces the fastest, longest range, easiest to recharge EVs in its market segment. Not only that, hundreds of thousands have reserved Tesla vehicles for purchase — so a huge chunk of future demand is in the bag.

Traditional automakers like BMW presently possess none of these advantages. BMW must contract out with other battery producers to guarantee its electrical vehicle ramp. This makes it less able to respond to demand signals than Tesla. BMW’s charger network is also third party — and it presently lags behind Tesla in supercharger capability. And BMW won’t be producing EVs capable of competing directly with high-spec Tesla cars until 2020 at the earliest. This due, primarily, to the fact that Tesla has a leap or two ahead in battery tech. BMW, in other words, is waiting on lower cost batteries from Samsung.

(Tesla has a luxury that most other EV manufacturers don’t — owning battery production allows it to rapidly ramp its EV offerings. Only BYD possesses a similar capability. And, presently, Tesla battery tech appears to have achieved economies that are 1-2 years ahead of the competition. Image source: Building Tesla.)

Moreover, automakers like BMW will see increasing competition coming from Model 3 for their high-margin luxury and sport ICE vehicles. Model 3 performs as well or better than pretty much all of these cars, has a lower cost of ownership by far, and doesn’t spew nasty fumes.

In short, Tesla has established for itself a top pole position in the race to provide win the future of automobile manufacturing. The rest of the pack is pretty far behind at present. And if we know one thing about Tesla, it’s very good at acceleration.

Clean energy and climate change action advocates take note — Tesla is working hard to deliver on its sustainability promises. It is expanding EVs, solar, and battery storage on many fronts. And it has produced an all clean energy business model that no western corporation has yet to successfully emulate at scale.

This is still far short of Tesla’s stated goal of 2,500 Model 3s per week by the end of this Quarter. It is even further from the 5,000 Model 3 per week goal it has established for 2018. However, most other EV manufacturers are being left in the dust by this so-called ‘slow’ production ramp.

Take the Chevy Bolt, for example. Here’s a well-built EV that some claimed would steal Tesla sales. That Chevy originally stated it expected to sell at a rate of 50,000 per year. Last year, Bolt sold 26,000 worldwide. Pretty decent. But if GM had marketed the high-quality, long range car with the same fervor that Nissan markets the Leaf, it’s entirely likely that Chevy could have gotten much closer to that 50,000 goal.

(Tesla’s vision for a clean energy future is a work in progress that is refined step-by-step. Case in point — adding solar panels to the Tesla Gigafactory 1 in Nevada. Image source: Building Tesla.)

Now Bolt is selling at the rate of about 1,250 per month in the U.S. during early 2018. Chevy is assuring prospective EV customers it will ramp up production again soon. But, so far, these are just assurances. Meanwhile, Model 3, despite delays, just sold about 2,485 in February and, in all likelihood, will approach or cross the 3,000 mark during March. Another way of putting it is that a delayed Model 3 just blew Chevy Bolt sales out of the water.

To set out a marker, Tesla sold approximately 100,000 vehicles globally during 2017. This year, depending on how quickly the Model 3 ramps up, it will likely sell between 150,000 and 250,000.

The activity of Tesla in deploying EVs and other clean technology could well be described as building and improving a plane already in flight. Tesla vehicles are produced and sold to employees during beta testing even as the production line is refined and worked out. Low rate initial production then follows. And after that, mass market production and scaling. We saw this most clearly in the launch of the Model X which, though slow, ramped up to produce the best selling all-electric SUV in the western world.

(Tesla historic quarterly production through end of 2017. Note that Model 3 will likely produce between 6,000 and 8,000 units during Q1 of 2018. Data source: Tesla. Image source: Daniel Sparks.)

Despite likely battery production kinks, Model 3 will probably deliver between 6,500 and 8,500 units during Q1 of 2018 or nearly twice the number of Model X’s delivered 3 quarters in. It’s also about 25 to 60 percent more than the number of Model S’s hitting roads after 3 quarters. Facts that should be taken into account.

At the same time that Tesla is working through the Model 3 production ramp, it is also continuing to innovate. Recent satellite photos reveal that the Nevada Gigafactory 1 — which is producing batteries even as it is under modular construction — is starting to add solar panels to its roof top (see image at top). These panels will reduce the amount of carbon emitted in producing each battery pack. In turn, reducing the sunk carbon cost of producing each Model 3 and, ultimately, each Model S and X. Thus increasing the already substantial net carbon reductions achieved by each Tesla clean energy vehicle vs dirty gas and diesel guzzlers.

Meanwhile, the Tesla Semi — which was announced just 112 days ago — is already entering Tesla’s factory vehicle fleet to haul freight in the form of Nevada Gigafactory produced battery packs shipped to the California production plant. So it seems that the all-electric Semi has shortly started its own live testing prior to expected sales during 2019. And the Semis, like the solar panels are helping to further improve Tesla’s already substantial carbon emissions reductions.

In other words, Tesla’s work in progress model is working. It is producing. It is testing, and improving. It is delivering. Clean energy Model 3, Model X, Model S and the Semi are not just concepts. These are designs in operation that are being sold and used even as their production paths are expanded. This is what actual delivery of innovative, cutting edge, climate change impact reducing products looks like. The form an actual value-driven (as opposed to solely profit-driven), sustainability-driven business model takes. The rest of the auto industry should be standing at attention.

With climate change enhanced wildfires raging across California during December, now is exactly the time to redouble our resolve to fight against the causes of such widespread destruction. To enact policies aimed at reducing the force of a rising crisis that continues to impact so many of our people with increasing intensity.

In California today, there is a move afoot to set a deadline for banning the very fossil fuel based vehicles that have fanned the fires of climate change across the state. To resolve, by 2040, to take gas powered cars off the road.

Phil Ting, a San Francisco Democrat and sponsor of this legislative drive, notes that for the State to meet its greenhouse gas reduction targets, it’s going to have to transition away from fossil fuel based vehicles. Such vehicles represent more than 1/3 of all state carbon emissions. And the state can’t effectively address the carbon dioxide emissions that drive climate change disasters without also directly targeting the number of fossil fuel based vehicles in operation.

New electrical vehicle (EV) technology is enabling just such a move. According to Ting:

“The market is moving this way. The entire world is moving this way. At some point you need to set a goal and put a line in the sand.”

If California sets a policy to ban fossil fuel based vehicles by 2040, it will join a growing number of cities and states that have already set similar goals. These include France, the United Kingdom, India, Germany, and Norway. Meanwhile, China is pursuing very aggressive incentives to increase the number of EVs as a means of combating terrible local air pollution and climate change.

Movement by cities and states to ban fossil fuel vehicles and incentivize EVs has an out-sized impact. It signals automakers that EV preference by government is becoming widespread. And because manufacturers have limited capital to spend on new vehicles, this drives a manufacturing preference as well.

(In this National Renewable Energy Laboratory study, the most rapid carbon emissions reductions were achieved in scenarios where large-scale EV deployment was combined with wholesale replacement of coal, oil, and gas fired electricity generation with renewable sources like wind and solar.)

In addition, the manufacturing base for EV batteries can also be used to build storage systems for intermittent wind and solar energy. This enables the removal of fossil fuel emitting coal and gas fired generators held in reserve for times when the wind doesn’t blow or the sun doesn’t shine even as the EVs themselves remove the need for oil based transporation. Such a manufacturing chain also opens up a new market for auto manufacturers — a fact that both Tesla and Hyundai have learned to their benefit.

Wait for another record in battery storage..It looks like 2018 will be an exciting year for battery! https://t.co/z6xQMp2tuj

Because EVs are based on electronic technology that is closely tied to the information age, they can benefit both from synergistic related economies of scale and from various innovations and breakthroughs. This means that EVs already outperform fossil fuel based vehicles in a number of areas. A performance advantage that is increasing and will likely overcome most traditional vehicles by the early 2020s. Because of this advantage, EVs would probably ultimately win out over time. However, the present climate crisis lends urgency to speeding their rate of adoption and in accelerating the rate of harmful fossil fuel based vehicle replacement.